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RETAIL BANKING | Cesar Tordesillas, India

Shriram City Union Finance being readied for bank entry

Shriram Group to enter banking business.

It's retail financing arm, Shriram City Union Finance, is being readied for the purpose.

But such an arrangement can come into being only if the government's guidelines for new banking licences, expected shortly, permit an NBFC and a bank under the same owners. If that's not allowed, the official said, the group could give up the idea of entering banking business. That is because the group is uncomfortable with the fallout of the other option it has — merging retail and transport financing companies.

Three-fourths of the merged entity will cater to commercial vehicles. Such a high exposure to a single segment may not be to RBI's liking. But, then, the group doesn't want to tinker with a tried-and-tested model that the transport finance company represents.

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